Berlusconi found guilty after case that cast spotlight on murky premiership

Former Italian prime minister given seven-year jail term and banned from public office for life at Milan court

Lizzy Davies in MilanThe Guardian, Tuesday 25 June 2013

After more than 26 months, 50 court hearings and countless breathless column inches from journalists worldwide, it took just four minutes for the sentence that Silvio Berlusconi had feared to be delivered. At 5.19pm, before a fascist-era sculpture showing two men struck down by a towering figure, the judges swept into the courtroom and pronounced their damning verdict for Italy's longest-serving postwar prime minister. By 5.23pm, it was all over.

At the culmination of a trial that helped strike the final nail in the coffin of the playboy politician's international reputation, the judges found Berlusconi guilty both of paying for sex with the underage prostitute nicknamed Ruby Heartstealer and abusing his office to cover it up. They even went beyond the prosecutors' sentencing requests, ordering him to serve seven – rather than six – years in prison and face a lifetime ban on holding public office.

Perhaps fittingly for a case that cast a spotlight on the murky nexus of sex and power that prosecutors argued was at the heart of his premiership – in which young women were procured, they said, "for the personal sexual satisfaction" of the billionaire septuagenarian – all three judges were female.

Berlusconi, who had been predicting the verdict for weeks as the logical result of his lifelong "persecution" by leftwing prosecutors, has always denied the charges and now has the right to lodge not one but two appeals. The sentence will be enforced only if these fail and it is made definitive, a process that could take years. Regardless of whether it is eventually upheld, Berlusconi is highly unlikely ever to go to jail.

There were some notable absentees in court on Monday: Ilda Boccassini, the formidable prosecutor who had led the case against the 76-year-old, and Karima el-Mahroug, the former nightclub dancer from Morocco whom Berlusconi was convicted of paying for sex in 2010 when she was 17, below the legal age of prostitution in Italy. Both he and she denied having "intimate relations" and claimed the thousands of euros he gave her were simply the support of a generous friend.

The more serious charge, however, was that in May of that year he exerted prime-ministerial pressure on police in Milan to release Mahroug from custody for fear she would reveal details of their liaisons. He admitted having made a call to police, but said he did so in the belief that her detention might cause a "diplomatic incident" because he believed her to be a relative of Hosni Mubarak, then the president of Egypt.

Berlusconi himself also chose to stay away from the court. The leader of the centre-right Freedom People (PdL) party was reported to have waited for the verdict at the Villa San Martino in Arcore, scene of the by-now infamous "bunga bunga" parties where, prosecutors argued, he held raucous evenings of striptease and sex with young women he remunerated handsomely.

Afterwards, he expressed outrage at the verdict, which he said was politically motivated. "An incredible sentence has been issued of a violence never seen or heard of before, to try to eliminate me from the political life of this country," Berlusconi said in a statement.

"Yet again I intend to resist against this persecution because I am absolutely innocent and I don't want in any way to abandon my battle to make Italy a country that is truly free and just."

One of his staunchest allies, the PdL MP Daniela Santanché, had listened to the sentencing in immaculate disbelief. "This is a political sentence that has nothing to do with justice," she told swarms of reporters trailing after her down the stairs of Milan's vast palazzo di giustizia. "These women have used other women for political motives. The defence lawyer Niccolò Ghedini said the sentence was "beyond reality".

For many Italians, however, the verdict was entirely proportionate. Ever since the first media reports emerged in 2010 and the then prime minister was placed under formal investigation in January 2011, the drip-feed of sordid details from Arcore via the courtroom has tested traditional tolerance towards politicians' private lives.

The prosecutors argued that, rather than the innocent, elegant dinner parties of Berlusconi's claims, the soirées were in fact a chance for the then prime minister to procure the sexual services of a variety of women. Two witnesses told investigators of an eyebrow-raising game involving a statue of the fertility god Priapus; in a separate but related trial, Mahroug testified that women had dressed up as nuns and nurses before stripping. On one notable occasion, she claimed, one had even paraded alternately as Barack Obama and the flame-haired Boccassini.

One person who will be less than delighted by the verdict is Enrico Letta, Italy's current prime minister, who has the unenviable task of holding together a fraught grand coalition of his centre-left and Berlusconi's centre-right. Although he occupies no ministry, Berlusconi still plays an influential role in national politics, and he has the power – as Letta is acutely aware – to bring it down by withdrawing his support and triggering new elections.

Some observers say that the verdict – which showed that even in his latest incarnation of benevolent, self-sacrificing statesman, he is not protected from the long arm of the law – may have brought that a step closer. Tensions were made clear in a curt statement by Angelino Alfano, PdL secretary and deputy prime minister. The sentence was, he said, "contrary to common judicial sense, good sense, and worse than the worst expected".

Others, however, predict Berlusconi will make no immediate move, preferring to keep up pressure on Italy's supreme court before another, less salacious but potentially far more damaging verdict, expected by the end of the year: the definitive ruling on tax fraud charges for which he is approaching the last roll of the dice.

If the court of cassation upholds his conviction, he will face not only a four-year jail sentence but also – more pertinently for a man whose political ambitions have never died – a five-year ban on public office. For many people, though, the verdict was already quite something. "A conviction to save the dignity of Italy," read the placard of a woman standing outside the courthouse with an all-female group singing the Italian Resistance song "Bella ciao" ("Bye-bye, beautiful"). Another declared: "Berlusconi is ineligible, unsupportable, unpresentable."

Ireland's prime minister, Enda Kenny, said Irish people were entitled to be angry about revelations that an executive at the firm that almost bankrupted the country boasted he had picked the €7bn (now £6bn) figure purportedly needed to rescue Anglo Irish Bank "out of my arse".

Taped phone calls between two senior executives at Anglo Irish have compounded suspicions that bankers lured the then Fianna Fáil-led government during the crash of September 2008 into a costly financial trap.

Irish taxpayers were eventually forced to hand over €30bn to save Anglo Irish Bank from collapse. The huge bailout resulted in the state going cap in hand to the International Monetary Fund, the European Central Bank and the EU to save the country from bankruptcy.

The audio recordings, obtained by the Irish Independent, are between Anglo's director of capital markets, John Bowe, and Peter Fitzgerald, head of the retail bank, in September 2008. Initially the bank asked Ireland's central bank for €7bn to prop up its parlous finances following the Irish property crash. Critics of the bailout have insisted Anglo executives always knew the figure would be far higher – ultimately more than four times higher.

On tape Fitzgerald asks Bowe how he arrived at the figure of €7bn, to which Bowe replies: "Just as Drummer [the then Anglo Irish Bank CEO David Drumm now in exile and disgrace in Boston] would say, 'picked it out my arse'."

Speaking in Dublin on Monday afternoon, the taoiseach said he was constrained in what he could say about the Anglo Irish Bank as a result of the continuing Garda Siochana criminal investigation into it.

However, Kenny promised that there would be a parliamentary banking inquiry, and said: "Believe you me, I understand the rage and the anger of so many people who have been affected by all of this."

He added: "I have made the point in the Dáil on many occasions that … I don't have any paperwork to advise me as to the conversations that took place between members of the government and the banks on the run-in to that period."

The taped conversation between the bankers tends to back up the view that Anglo Irish bankers knew €7bn would never be enough to save the bank but once they had hoodwinked the Dublin government into providing support the taxpayer would keep picking up the tab.

In their exchange, Bowe says: "The reality is that actually we need more than that. But you know the strategy here is you pull them in, you get them to write a big cheque and they have to keep, they have to support their money, you know."

On the Irish government getting entrapped by Anglo, Bowe adds: "If they saw the enormity of it up front … they might decide they have a choice. You know what I mean? They might say the cost to the taxpayer is too high. But … em … if it doesn't look big at the outset … if it looks big, big enough to be important, but not too big that it kind of spoils everything, then I think you have a chance."

The two bankers are also heard laughing and joking at a time when the bank was tottering on the brink of destruction. They are heard saying they hope the bank is nationalised so "we'd keep our jobs".

Bowe, who was approached over the weekend about the 2008 conversations, claimed the remarks were "off-the-cuff comments" and denied he was trying to mislead the state.

Fitzgerald released a statement through his solicitor saying: "I am not nor have I ever been aware of a strategy or intention on the part of the Anglo Irish Bank to mislead authorities in relation to the forecasted funding position of Anglo Irish Bank."

Despite the pair's denials, the taped conversations come at a critical time in the bank's history and will increase the pressure for a full parliamentary inquiry into the bank rescue deal, which cost the taxpayer a further €30bn after two other debt-ridden banks, the Bank of Ireland and Allied Irish Bank, also had to be saved from collapse.

Anglo Irish Bank, which was the preferred lender for property speculators and builders, epitomised the rise and ignominious fall of the Celtic Tiger economy.

No senior Irish banker has so far been found guilty of any offence in any court.

The situation in Afghanistan is becoming so precarious that Afghan diplomats no longer want to return to their homeland. Up to 100 foreign service employees set for rotation back to Kabul from assignments abroad have now defected.

A total of 105 Afghani diplomats were meant to report for duty at the Foreign Ministry in Kabul on Saturday. They were being rotated out of their foreign postings as scheduled, and it was time to return to headquarters. Yet just five of them have resurfaced. The others have apparently remained in the countries where they had been posted, among them several employees of the Afghan Embassy in Berlin.

Sources at the Afghan Foreign Ministry have informed SPIEGEL ONLINE that embassy staff members have said they would apply for asylum in their respective host countries or at least apply for an extension of their service until the presidential election in spring 2014. "They are hoping that there is more clarity about the future of our country by that point," said an employee of the ministry. "I feel as though there has been an exodus. No one wants to return to Afghanistan," said the employee, who added that they couldn't be faulted for wanting to stay away from"the situation in the country."According to recent surveys, most Afghans believe the country will sink into chaos and violence and expect that civil war will break out once Western forces withdraw at the end of 2014. For months, the Taliban and various other ethnic groups have been arming themselves in preparation for a fight for power in the country.

The Fiction of a Bright Future

Many Afghan diplomats are the sons and daughters of high-ranking politicians who are also trying to go abroad as soon as possible and stay there until the situation in Afghanistan becomes clearer.

International foundations and organizations that organize educational trips and conferences for Afghans abroad have also become more cautious recently. They know that more and more trip participants will disappear. It is said in Kabul that several Afghan teachers never returned from a trip organized recently by the German government. And a high-ranking official from the Afghan Foreign Ministry called home during a trip to Canada to say that he wouldn't be coming back.

"I can confirm this trend," says Tinko Weibezahl, the head of the Kabul office of the Konrad Adenauer Foundation. "In recent months some of our most qualified contacts have left the country. The refugees are above all "the highly educated, who were much more optimistic about the future a year ago," Weibezahl says. Government ministers, lawmakers and senior military officials are also attempting to get their families out of the country.

The story of the hopeful future of an Afghanistan that stands on its own two feet, that is safe and peaceful and democratically governed, "is just a story that the West likes to tell us," says a senior official from the presidential palace in Kabul. "This story has just one catch: Most Afghans don't believe it."

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June 25, 2013

Taliban Launch Deadly Attack in Kabul

By ALISSA J. RUBINIHT

KABUL — At least four suicide bombers launched a daring and sophisticated attack on the heart of the Afghan government early Tuesday morning, using at least two land cruisers similar to those used by international soldiers here, fake badges and vehicle passes, which allowed at least one to get inside the heavily guarded area, according to Kabul’s deputy police chief.

The Taliban sent a statement taking responsibility for the attack and saying the targets were the Ariana Hotel, which they said is the C.I.A. base in Kabul, and the presidential palace.

The attack came just days after the Taliban opened an office in Doha, Qatar, ostensibly for starting negotiations about a peace process. It raised new questions about divisions within the Taliban and whether there is any broad commitment to peace.

At least five people were killed in the attack. For the first half-hour of the attack, which began about 6:30 a.m. local time, gunfire could be heard across the Green Zone diplomatic area of Kabul, the location of the presidential palace and the headquarters of the International Security Assistance Force.

It was unclear exactly how far the attackers had gotten into the Green Zone, but the gunfire and explosions could be heard throughout the area.

“Three suicide bombers were driving a land cruiser packed with explosives with a fake vehicle pass and they wanted to enter the presidential palace area but they were stopped at the gate,” the police chief, Gen. Ayoub Salangi, said in a brief telephone call. “We don’t know their main target.”

Once the guards realized that the pass was fake, the suicide bombers got out of the explosive-laden car and one of them detonated it, killing one of the attackers. The others got into a firefight with the guards, General Salangi said. However, people in the Afghan security forces who asked not to be identified said that there were two vehicles that got through a heavily guarded gate used only by ministerial-level officials.

A government official told Reuters that three or four other attackers were killed by security forces and at least two Afghan security guards were killed in the firefight.

The U.S. Ambassador to Afghanistan, Jim Cunningham, assailed the violence and urged the Taliban to once again return to the peace process in Doha.

‘'We remain steadfast in supporting the Afghan government and people against the scourge of terrorism and the violence directed against them,'’ he said.

Pakistan Premier Says Former Military Ruler Will Be Charged With Treason

By SALMAN MASOOD and DECLAN WALSHIHT

ISLAMABAD, Pakistan — Prime Minister Nawaz Sharif said Monday that his newly installed government intended to press treason charges against the former military ruler Pervez Musharraf, setting up a potential clash with Pakistan’s powerful military.

In a speech to Parliament on Monday that was sharply critical of military rule, Mr. Sharif said Mr. Musharraf had to answer for his acts during his years in power, comments that drew loud applause from Mr. Sharif’s supporters.

But the government has stopped short of pressing formal charges against Mr. Musharraf because Mr. Sharif has said he wants to first consult with the country’s other political parties, casting some doubt over whether the case will proceed.

The case stems from Pakistan’s activist Supreme Court, where judges have instructed Mr. Sharif to decide whether Mr. Musharraf should face treason charges. The former army chief already faces charges in four cases relating to his period of rule from 1999 to 2008.

He has been under house arrest at his villa outside Islamabad since April, shortly after his return from years of exile abroad.

The judiciary’s stiff treatment of Mr. Musharraf has stirred disquiet in parts of the military. Officers and soldiers are uncomfortable at the sight of a former army chief being dragged through the courts, a shocking move in a country that the military has ruled for more than half of its 66-year history.

The military under its commander, Gen. Ashfaq Parvez Kayani, has largely steered clear of Mr. Musharraf’s court troubles until now. It has, however, provided him with a security cordon at his Islamabad home. But treason charges against Mr. Musharraf, analysts say, could change that picture considerably.

The case against Mr. Musharraf is based on charges that he subverted the Constitution when he imposed emergency rule in late 2007. Musharraf supporters have issued dark hints that should treason charges be applied, the army might forcibly intervene.

“It would open a Pandora’s box,” said Ahmad Raza Kasuri, a senior aide to Mr. Musharraf, while his spokesman described the moves to bring such charges as a “circus.”

“It takes the focus away from the serious challenges faced by the nation and could result in unnecessary tension among the various pillars of state, and possibly destabilize the country,” said Reza Bokhari, the spokesman.

Mr. Sharif is hoping to prevent a drastic military intervention by seeking cross-party political support for a treason trial, which could result in the death penalty or life imprisonment for Mr. Musharraf.

The federal government will “take political forces into confidence through a consultative process so that the collective will and wisdom of the people of Pakistan is duly reflected in further process in this behalf,” Mr. Sharif told Parliament.

Some opposition leaders have already expressed support for a trial. But Mr. Sharif will also have to shake off the impression that he is engaged in a judicial witch hunt against an old enemy.

The two men clashed bitterly in 1999, when General Musharraf, then the army chief, ousted Mr. Sharif, the prime minister, in a coup. A year later, Mr. Musharraf banished Mr. Sharif into exile in Saudi Arabia.

Mr. Sharif returned to Pakistan in 2007, and his party won a comfortable victory in the May 11 election. Mr. Musharraf, meanwhile, returned from four years in exile to contest the same election, only to find himself disqualified from the electoral process.

But the treason charges are also being stirred by the Supreme Court, led by the independent-minded chief justice, Iftikhar Muhammad Chaudhry, who is also an old rival of Mr. Musharraf. Some analysts said the judges had forced Mr. Sharif’s hand.

In the Supreme Court on Monday, judges questioned the attorney general about whether the government intended to bring charges.

The government asked for 30 days’ leave, but the court instructed it to return to court and provide further details on Thursday.

Critics of the charges argue that Mr. Musharraf was not alone in his actions and that he enjoyed the support of senior officers and civilian officials when he was in power.

Salman Masood reported from Islamabad, and Declan Walsh from Johannesburg.

SEOUL, South Korea — Six months after their Dec. 19 presidential elections and four months after President Park Geun-hye was sworn in, South Koreans found this week that the election skirmishing was not quite over. At the National Assembly in the past week, some liberal opposition lawmakers have begun questioning the legitimacy of Ms. Park’s election, citing a recent announcement from prosecutors that the country’s National Intelligence Service had staged an online smear campaign against her rivals ahead of the December election.

At university campuses and in downtown Seoul, groups of students rallied in anger, shouting, “Out with Park Geun-hye!”

Desperate to reverse its political fortune, Ms. Park’s New Frontier Party reloaded the weapon it had effectively used to rally conservative votes last year: its claim that the last liberal president, Roh Moo-hyun, was a pro-North Korean fraud and by extension, the liberals could not be trusted.

The conservative counteroffensive gained a new intensity this week when the intelligence agency released what it called the transcript of the 2007 inter-Korean summit meeting between Mr. Roh and the then-North Korean leader Kim Jong-il. Governing-party lawmakers have long called for the transcript’s release, saying it would prove that the summit was a political sellout.

Its release raised sensitive diplomatic questions.

“If they release the transcript of a summit meeting for domestic politics, now you wonder, Which foreign head of state will talk frankly with the South Korean president?” said Koh Yu-hwan, a professor of North Korean studies at Dongguk University in Seoul.

The intelligence agency said in a statement that it decided to make the summit records public to help end distracting political controversy over the meeting. But the main opposition Democratic Party accused the agency of unilaterally releasing what should have been guarded as classified material for many years in order to divert public attention from its election scandal. On Tuesday, some of its leaders challenged the government to release the transcript of Ms. Park’s only summit so far, with President Obama on May 7, to check whether she didn’t say anything compromising South Korea’s national interest.

Ms. Park is set to meet President Xi Jinping in Beijing on Thursday. North Korea has not yet reacted to the release of the transcript.

The current political firestorm involved North Korea, as many political disputes do in South Korea. And it began earlier this month, when prosecutors announced that Won Sei-hoon, former director of the National Intelligence Service, ordered a team of agents to launch an online campaign to discredit not only what he called “followers of North Korea” but also government critics, including opposition candidates of the December election.

It remained unclear whether the online postings by the agents affected the result of the election. Prosecutors also did not clarify whether the agents directed by Mr. Won, who was appointed by Ms. Park’s predecessor and fellow conservative, Lee Myung-bak, were attacking the opposition candidates for the specific goal of helping her win the election.

In her first comment on the scandal, President Park on Monday denied having anything to do with the alleged operation.

Prosecutors indicted Mr. Won on charges of violating the election law but refused to arrest him. (In contrast, they had tried last month to arrest a journalist for reporting an unconfirmed suspicion that Ms. Park’s brother might have been involved in the murder of a relative. A court denied them an arrest warrant.) Nor did the prosecutors arrest or indict the intelligence agents involved in the online operation, saying that they were just following Mr. Won’s orders.

Calling the prosecutors’ inquiry a whitewash and claiming that the alleged illegal online election campaign was more extensive than prosecutors revealed, opposition parties called for a separate parliamentary investigation. Then suddenly last week, the governing party revived its claim about the 2007 inter-Korean summit.

“The ruling party faced the worst of crises because the prosecutors’ announcement alone tainted the legitimacy of President Park’s election,” said Kim Hyung-joon, a professor of political science at Myongji University in Seoul. “So as a counterbalance, it pulled out a card it had used to a great effect during the election.”

The transcript of the 2007 summit, which was made available to the public on Tuesday, contained no bombshell. It reaffirmed the well-known image of Roh Moo-hyun as a liberal president whose efforts for greater reconciliation with North Korea and whose blunt attack on his conservative enemies at home and U.S. policy on the Korean Peninsula had thrilled young liberals but alarmed older conservatives. Mr. Roh committed suicide in 2009.

In the transcript, Mr. Roh was quoted as saying that it was “a shame” that U.S. troops had been stationed at the center of the South Korean capital, Seoul, for so long, while conservative South Koreans considered their presence a symbol of national security. He also cited surveys in South Korea at the time in which the United States under President George W. Bush was picked as the biggest threat to peace on Northeast Asia.

The most controversial part of the summit was what Mr. Roh said about the so-called N.L.L., or Northern Limit Line. When an armistice was signed in 1953 to halt the three-year Korean War, the warning armies could not agree on a western sea border. The American-led United Nations Command, which led the South Korean side of the war, unilaterally imposed the N.L.L. as a temporary sea border.

North Korea has never accepted boundary, claiming a border line farther south. The navies of the two Koreas fought bloody skirmishes in disputed waters around the N.L.L. in 1999 and 2002. Easing tensions in the waters was a key topic when Mr. Roh traveled to Pyongyang in 2007 only months before his five-year term ended in February the following year.

In the 100-page transcript, Mr. Roh was quoted as saying that the “N.L.L. should be changed.” He then proposed to create a “peace-economy zone” over the disputed frontier waters. His idea of creating such a zone for joint fishing and sea routes between the two Koreas had been well publicized before and after his summit.

But his plan was never carried out because conservatives came to power in 2008 and their president, Lee Myung-bak, killed Mr. Roh’s summit deal. In 2010, a South Korean warship was sunk in the same waters, killing 46 sailors, in an explosion that the South blamed on a North Korean torpedo attack. North Korea also shelled a South Korean island in the area in the same year.

During the South Korean presidential race last December, “defending the N.L.L.” had become a favorite conservative catchphrase. During her campaign, Ms. Park’s party claimed that during the 2007 summit, Mr. Roh offered to “give away the N.L.L.” to the North Koreans and that her main opposition rival, Moon Jae-in, who had served as Mr. Roh’s chief of staff, thus was unfit to lead the country.

Mr. Moon, who lost the election to Ms. Park by a million votes, said he would not go so far as to claim that the election was invalid because of the intelligence agency's scandal, but he called on Ms. Park to ensure that the intelligence agency never gets involved in domestic politics. He also denied that Mr. Roh had intended to compromise South Korean interests during his meeting in Pyongyang.

To conservatives, Mr. Roh’s idea on border waters was naive, tantamount to “undermining South Korea’s sovereignty,” a sentiment that Ms. Park appeared to share.

“We must never forget that the N.L.L. has been defended by the blood and lives of many young men,” she was quoted as saying during a Cabinet meeting on Tuesday.

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North and South Korea websites shut amid hacking alert

Government and media websites shut down as cyber-attack fears plague region on 63rd anniversary of Korean war

Several government and media websites in South and North Korea were shut for several hours on the 63rd anniversary of Korean war, and Seoul said its sites were hacked and alerted people to take security measures against cyber-attacks.

It was not immediately clear whether the shutdown of North Korean websites, including those belonging to Air Koryo and the Rodong Sinmun newspaper, was triggered by hacking. Rodong Sinmun, Uriminzokkiri and Naenara websites were operational a few hours later.

South Korean national intelligence service officials were investigating the cause of the shutdown of the North Korean websites. Pyongyang did not make any immediate comment.

Seoul said it was also investigating attacks on the websites of the presidential Blue House and the prime minister's office as well as some media servers.

The attacks in South Korea did not appear to be as serious as a cyber-attack in March, which shut down tens of thousands of computers and servers at broadcasters and banks. There were no initial reports that banks had been hit or that sensitive military or other key infrastructure had been compromised.

It was not immediately clear who was responsible, and the neighbours have long traded accusations over cyber-attacks.

Several Twitter users who purported to be part of a global hackers' collective claimed they attacked North Korean websites. Shin Hong-soon, an official at South Korea's science ministry in charge of online security, said the government was not able to confirm whether these hackers were linked to the attack on South Korean websites.

Officials in Seoul blamed Pyongyang for the attacks in March and said an initial investigation pointed to a North Korean military-run spy agency as the culprit.

In recent weeks the North has pushed for talks with Washington amid soaring tensions on the Korean peninsula, culminating in Pyongyang making threats over UN sanctions and US-South Korean military drills.

Investigators detected similarities between the cyber-attack in March and previous hacking attributed to the North Korean spy agency, including the recycling of 30 of 76 malware programs used in the attack, South Korea's internet security agency said.

The cyber-attack on 20 March struck 48,000 computers and servers, hampering banks for two to five days. Officials said no bank records or personal data were compromised. Staff at the TV broadcasters KBS, MBC and YTN were unable to log on to news systems for several days, although coverage continued. No government, military or infrastructure targets had been affected.

South Korea's national intelligence service said the North was behind a denial of service attack in 2009 that affected dozens of websites, including that of the presidential office. Seoul also believes Pyongyang was responsible for attacks on servers of Nonghyup bank in 2011 and Joongang Ilbo, a national daily newspaper, in 2012.

Pyongyang blamed its neighbour and the US for cyber-attacks in March that temporarily disabled internet access and websites in North Korea.

Experts believe North Korea trains large teams of "cyber-warriors", and say the South and its allies should be braced for attacks on infrastructure and military systems. If the inter-Korean conflict were to move into cyberspace, South Korea's deeply wired society would be more widely affected than North Korea's, which largely remains offline.

BEIJING — China’s hidden banking system is coming out of the shadows as the government seeks to rein in the excessive lending that it fears could spin out of control.

The People’s Bank of China, the central bank, let the world know on Monday that it was putting the nation’s banks on notice: the loose money and the speculation it fed had to stop. It said banks had to step up risk controls and improve cash management. And they had to do it, the bank said, by avoiding a “stampede” mentality.

The banks had quietly received that very message a week earlier, which set off, if not a rush for the exits, certainly widespread worry in China and financial centers around the world.

It precipitated a cash squeeze among the banks that sent their short-term interest rates sharply higher last week. The crackdown, which appears aimed at reining in banks engaged in complex deals that involve hiding and repackaging risky loans so that regulators cannot notice them, also led to a sharp sell-off in stocks worldwide during the last week. Investors feared it might further slow the Chinese economy.

China, the world’s second-largest economy after the United States, has a huge influence on the world economy so the actions of its central bank are closely watched across the globe. But its financial and banking system remains opaque to Chinese and foreigners alike. Within the government’s own warnings about lending lies its dilemma: it needs to control where money is being lent at the same time it wants to reform a banking system that has grown dependent on government direction.

“The government knows some banks are doing things that aren’t prudent,” says Yukon Huang, a senior associate at the Carnegie Endowment for International Peace in Washington. “Some of them are taking easy money and putting it in Ponzi schemes. The government is saying, ‘Don’t do that any more. And don’t count on the government to bail you out.’ ”

Li Keqiang, China’s prime minister, who took office last March, has promised a more market-oriented approach to managing the economy. And analysts say his economic advisers are pressing to reorganize the economy in a way that will allow it to respond better to market forces.

But to put such reforms in place, the new government is going to have to take on powerful state-run companies and interest groups that sometimes resist pressure from the center or turn to allies in the central leadership who block such moves.

The government’s target is the sharp and potentially dangerous rise in the so-called shadow banking. Banks borrow at the low interbank rate, then lend to trust companies and smaller banks who in turn make riskier loans. The fear among some analysts is that the vast amount of bad debt and hidden liabilities the shadow banking system masks could start sinking banks. Those excesses could start a chain of other economic setbacks.

Most economists say China’s financial system is not facing huge systemic risks, and that growth could even come in at 7 percent, which would still make it the world’s fastest-growing major economy. But there are mounting concerns here that the good times could be over partly because the banking sector is hiding piles of bad debt.

The Chinese government has the policy tools to deal with a crisis, including huge foreign exchange reserves and the ability to force state banks to lend in a time of crisis. The People’s Bank of China is not an independent institution, like many central banks in major economies are; it reports to the central government.

But after years of pumping money into the economy, the central bank can see signs of diminishing returns. Banks lent a huge amount of money in the first half of this year, and yet growth has been tepid. Manufacturing has begun to contract, according to a recent survey, and banks seem desperate for more cash.

Last Friday, Fitch Ratings said in a report that less money in the market for interbank loans could hamper some banks from making payouts when high-interest financial instruments for China’s rich,called wealth management products, mature later this month.

Fitch said about $244 billion would come due later this month and that the effort to make the payout could send short-term borrowing rates even higher.

Wall Street analysts are now revising their economic growth forecasts downward and warning that the Chinese central bank’s refusal to alleviate commercial banks’ cash shortages by pumping more money into the economy could lead some smaller banks to default.

They warn of other dangers facing China’s economic policy makers. If the property market stumbles, some analysts fear that could wallop the broader economy.

China’s exports, long a strength, had been buoyant early in the year, according to official statistics. But some analysts have questioned whether trade statistics were being manipulated by speculators pretending to sell goods overseas in order to bring money into the country that they would then use to speculate in the financial markets.

The most recent export figures have been less robust, possibly hurt by China’s currency, the renminbi, which has strengthened over the last year against the dollar and the Japanese yen.

The prime minister and his economic team are trying to move swiftly to guard against a crisis down the road, after years of loose credit and heavy spending on manufacturing, property and infrastructure. But if they press too hard, analysts say, an already weakening economy could lock up, and see growth dip below 7 percent, starting even more trouble with the banking sector.

“To push through their reforms I think Li Keqiang and Xi Jinping are willing to accept lower growth,” says Nicholas Lardy, an expert on China’s economy at the Peterson Institute for International Economics in Washington.

Last Friday, a large group of bankers and entrepreneurs surveyed by the central bank said their confidence in the country’s macroeconomic conditions was weakening.

Loan demand was falling, said Xiang Songzuo, chief economist of the Agricultural Bank of China, according to the English language China Daily.

The Australian prime minister, Julia Gillard, has whipped up a stormafter appearing in the Australian Women's Weekly knitting a toykangaroo for the royal baby.

The photoshoot depicts the prime minister in an armchair, surroundedby balls of wool, with her dog Reuben at her feet.

The pictures have sparked controversy in parts of the Australianmedia, who have called it "contrived" and "remarkable". Commentatorshave pointed out that Gillard has traditionally rejected femininepresentations.

News Limited columnist Andrew Bolt said Gillard was "givingencouragement to young female politicians by plying a hobby nowsynonymous with mad old aunts." Nationals Senator Fiona Nash toldFairfax it looked like "a bit of a stunt" that showed "a lack ofconnection" with the Australian public. While senior LiberalChristopher Pyne said to reporters in Canberra: "We know the primeminister is good at spinning a yarn, now we have a picture to proveit."

Gillard has previously been criticised for her perceived lack ofhomemaking instincts. In 2005 much was made of a photograph in hersparse-looking kitchen with an empty fruit bowl on the table.

Defenders have pointed out that the opposition leader, Tony Abbott, isroutinely photographed taking part in his hobbies such as cycling andworking with his local surf club.

In an accompanying interview feature published online Gillard spoke ona range of issues, including her career legacy, family, September'sfederal election and her republican views.

She said she would look back on her time as Australia's first femaleprime minister with "a sense of pride and achievement," particularlyfor her work in health and education.

She said she decided to knit the kangaroo for the baby of PrinceWilliamand the Duchess of Cambridge as a gift, saying it would be "acute project to work on". She said she usually knitted for babies asthe smaller projects meant she had time to finish them in her busyschedule.

"I guess my life is full of the engagements that politics brings andsome are them are quite combative engagements," she said.

"I don't shy away from that. If there is something I hope I have donefor the image of women in public life it is that we can go into anadversarial environment like parliament and we can dominate it andconquer it.

"But that's not all of me. [Knitting the kangaroo] is an opportunityto show a side of me. I can't imagine [political commentator] LaurieOakes saying: 'Hmmm, knitting patterns. What are you working on at themoment?'"

Gillard also spoke candidly about her family.

Of her father John, who died in September, Gillard said: "Dad wasincredibly proud of me becoming prime minister, and incredibly proud,I think, that it was him that sparked the interest in values,politics, current affairs, and particularly education."

Not long after her father's death, the radio broadcaster Alan Jonestold a lunch attended by Liberal Party members John Gillard must havedied "of shame".

In the intervew Gillard also responded to last year's jibe fromGermaine Greer referring to her "big arse" on ABC TV's Q&A program,saying the statement "demeaned her more than it demeaned me".

"I do take a lot of pride in being someone who not only fought forequal opportunities for women," Gillard said. "But for her, giveneverything she stands for, everything she would have inspired, I justthought it was stupid."

Knitting the kangaroo for the royal baby did not clash with her viewsthat Australia should become a republic, she said.

"I campaigned for a yes case. We will get there again," she said.

"There is a real sense of respect for the Queen, so I do think anatural moment to look again will be when her reign comes to an end.

"Prince William and Kate, and their child will still be personalitiesin Australia; people will still follow their lives with interest."

Like much in Australian politics, the origins of the idea for theknitting photo shoot have been hotly disputed.

The Australian Women's Weekly article said that "having Ms Gillardpose with needles was not The Weekly's idea. Her office came up withit," quoting media director John McTernan [a former adviser to Tony Blair]as saying "it was a no-brainer".

The prime minister's press office responded on their blog, saying thatthey had suggested to the magazine that her gift for the royal babymight be of interest, but that it was the magazine which requestedGillard knit and bring Reuben along for the shoot.

More than 400 photos were taken and Women's Weekly had completecreative control over the shoot, it continued.

In response to that blog post, Australian Women's Weekly acknowledgedthe prime minister's office's denial of the suggestion but said, "inan email to the Weekly a staffer clearly outlines the idea of aknitting pattern".

Support of residents falls below 60% company said was needed to build southern hemisphere's largest windfarm

Oliver Milman guardian.co.uk, Tuesday 25 June 2013 07.33 BST

Hydro Tasmania has defended its decision to continue plans to create the southern hemisphere's largest windfarm on King Island, after a survey of residents narrowly failed to reach a target of 60% of community support.

A postal survey sent out to 1,500 King Island residents revealed that 516 out of 878 respondents want a feasibility study into the proposed 200-turbine windfarm.

This translates to 58.7% support for the study. Hydro Tasmania previously said it would not push ahead with plans for the windfarm if 60% or more of the community did not back the idea, prompting a furious response from anti-wind activists.

"Today's decision by Hydro Tasmania will only create further division in an already divided community," said Jim Benn, a King Island resident and head of the No TasWind Farm Group.

"Near enough is not good enough. 60 is 60, not 58.77.

"How can King Islanders ever trust Hydro Tasmania again? There is no way Hydro Tasmania can proceed to a feasibility study when 362 people or more than 40% of the King Island community has said no."

Benn said that the windfarm plans should be scrapped in favour of a planned golf course.

"The No TasWind Farm Group calls on Hydro Tasmania to keep to its word and abandon its feasibility study," he said.

"This whole debacle has unnecessarily divided our small community. It's time for healing so we can focus on a bright future built on golfing tourism, a future that would have been ruined by turning our home into a giant wind energy factory for Victoria."

However, Hydro Tasmania director of corporate services, Andrew Catchpole, insisted that it had the support to continue with the feasibility study, pointing out that the renewable energy company would create an annual community fund of around $1m for King Island.

Proponents of the windfarm, which would cover around 15% of the Bass Strait island, said the project would create around 500 direct and indirect jobs and between $7m and $9m of additional economic benefit for the island.

"I know some have implied that the figure of 60 is a number that will determine if the project goes ahead or not. However, we have always said that 60% would be a good indication of broad community support. We got 59% and that is a very good result," Catchpole said.

Catchpole said that further measurements on impacts would be made and that the King Island community would "have another chance to have its say" before any development application is lodged.

"From our consultation process we understand that the principal concern of the community is the visual impact of the wind farm, closely followed by the noise and health impact concerns," he said.

"Consequently, we will focus as a matter of priority on resolving the elements of windfarm feasibility that have the most impact on these concerns, especially location, so that we can address these areas of concern.

"While we believe the project if it proceeds to construction will have a significant and positive impact on the island's economy there is a long way to go before that happens. I can only repeat that this project will not proceed without ongoing broad community support."

The establishment of new wind-powered energy has become an increasingly contentious topic, with around 150 people attending a "wind power fraud rally" in Canberra last week.

Maurice Newman, the man slated to be Tony Abbott's top business adviser, has also taken a firm anti-wind stance and is among a group of landholders who are threatening to sue a neighbouring farmer for agreeing to allow wind turbines on his property.

Sheikh Hamad bin Khalifa Al Thani ruled since overthrowing his father in 1995 and played key role in arming Syrian rebels

Ian Black and agenciesguardian.co.uk, Tuesday 25 June 2013 10.33 BST

The emir of Qatar, the world's richest country per capita, has handed over power to his Harrow-educated son in a rare peaceful transition for the tiny but globally influential Gulf state.

In a short speech on state television, Sheikh Hamad bin Khalifa Al Thani, who has ruled since overthrowing his father in 1995, said the moment had come for a new generation to take over

"The time has come to open a new page in the journey of our nation that would have a new generation carry the responsibilities ... with their innovative ideas," said the 61-year- old sheikh.

"I address you today to inform you that I will transfer power to Sheikh Tamim bin Hamad Al Thani. I am fully confident that he is qualified for the responsibility and is trustworthy."

State television later showed streams of wellwishers greeting the outgoing emir and Sheikh Tamim at the royal court.

The emir did not specify when the change would take effect but a Qatari official had said the move would take immediate effect.

Sheikh Hamad, who has ruled since overthrowing his father in 1995, convened relatives and advisers in the Qatari capital, Doha, on Monday to reveal plans for his departure.

Unusually, news of the conclave was reported by al-Jazeera TV, which is owned by the government and usually avoids Qatari affairs.

Qatar has played a major role arming the rebels seeking to overthrow Syria's Bashar al-Assad, so the transition will be closely watched for signs of any policy shifts.

But Sheikh Hamad made no mention of the public face of Qatar's assertive foreign policy, prime minister and foreign minister Sheikh Hamad bin Jassim, a veteran politician who had been expected also to step down.

The new emir, Sheikh Tamim, 33, was educated at the English public schools Harrow and Sherborne before graduating from the Sandhurst military academy.

The move is a rare example of a Gulf leader who has stood aside of his own free will. But it does not appear to herald an outbreak of democracy in an area dominated by absolute monarchies that have been shaken by the Arab spring while resisting reform at home.

"This contributes another page to the chapter of the Arab spring, but it is not necessarily people power that has brought it about," said Salman Shaikh, of the Brookings Centre in Doha. "This is family transition based on traditional values, rather than a strictly democratic one."

Under the emir's rule, Qatar was transformed from a sleepy and underdeveloped backwater in the shadow of neighbouring Saudi Arabia to become a global political and financial power – with a native population of just 300,000, who enjoy the highest per capita income in the world.

Today it is the world's largest exporter of liquefied natural gas and has a sovereign wealth fund estimated to be worth $200bn (£130bn). It is also hosting the 2022 World Cup.

Diplomats and friends of the emir say he has been speaking privately about his plans for more than a year, including during a visit to Washington in April.

Qatar has played a central role in supporting the Arab uprisings of the past two years, extending armed support to the Libyan rebels fighting to overthrow Muammar Gaddafi and doing the same with the opposition to Assad.

But it has also been heavily criticised for its support for the Muslim Brotherhood, which is now in power in Egypt and Tunisia. In Damascus the emir is a hate figure, and stands accused of backing extreme Islamist rebel groups and of conspiring along with the US and Israel.

Even before the uprisings, Qatar was famous for its dextrous diplomacy and readiness to mediate in regional conflicts. It hosts a huge US airbase while also maintaining cordial relations with Iran.

Gulf sources say Sheikh Tamim is less keen than his father on the Brotherhood, but most observers predict continuity on key policies. "Tamim has matured a lot," said a family friend. "He will continue what his father started. He is a military man, and he is disciplined."

The emir's plans to step down were delayed by health problems – he is thought to have undergone a kidney transplant – and by the escalating crisis in Syria.

Even before confirmation that he was stepping down, social media users posted messages praising him.

"He's saying: 'Arab spring or no Arab spring – I am handing over to my son,'" said Saad Djebbar, a London-based lawyer who knows Qatar well. "But the emir put Qatar on the map, in colour. He has left the country with the highest per capita income in the world. Who had even heard of it before he was in charge? He had a vision, unlike his own father.

"This will change the traditional mindset in the region, where rulers stay until they die. Look at Saudi Arabia. The king is 90 and there is still resistance to change from one generation to another.

"With al-Jazeera he [the emir] ended the era of stagnant, one-sided Arab media. Now he is telling the others: 'Give youth a chance' – even though power stays in the family. It will lead to other changes."

Rumours were circulating of other surprise announcements, leading to speculation that Tamim might introduce constitutional changes after elections to an advisory council next year.

But on the eve of the power transfer, Sheikh Hamad issued a decree extending the term of the advisory Shura council, in effect indefinitely postponing elections that had been tentatively scheduled for the second half of the year.

The election would have been the first to the Shura council, 30 of whose 45 members are meant to be elected, with the others appointed by the emir, under a constitution approved in 2003. All the body's current members are appointed.

Qatar's internal affairs attract little outside attention, though human rights watchdogs have criticised the conviction of a poet accused of insulting the emir. There have also been calls for better conditions for foreign workers.

"Change at the top in Qatar will create unease in a region that is not used to the orderly abdication of rulers and key figures," said Chris Doyle of the Council for Arab-British Understanding in London.

"Other states may or may not like the precedent. The unease will be amplified by the major role Qatar has played in regional crises. Will the same policy towards Syria continue for example? Will a new generation push through the promised elections and democratic changes?"

************

How Qatar became a global power

The smallest Gulf monarchy is now an international brand

Ian Black guardian.co.uk, Tuesday 25 June 2013 08.57 BST

In 1995, when Sheikh Hamad deposed his father in a bloodless coup, Doha was a sleepy Gulf town that had traces of its pearl-diving past. Now it is a city of gleaming towers – capital of a tiny country that punches above its weight.

Qatar, the smallest Gulf monarchy, has become a global brand. Securing the 2022 World Cup was a PR triumph. It plans to compete to host the 2024 Olympics. It has a glittering portfolio: Harrods, the Shard, Paris St-Germain football club. Doha's Islamic art museum is a brilliant example of money in the service of high culture. Its sovereign wealth fund, the Qatar Investment Authority, has $100bn-$200bn assets in 30 countries. Its vice-chairman is the outgoing prime minister, Sheikh Hamad bin Jassim. Qatar is Britain's top supplier of liquefied natural gas.

The TV news channel al-Jazeera, founded in 1996, has been a successful example of "soft power", breaking taboos in a region dominated by state media. But it has lost credibility during the Arab spring by being so openly partisan in support of revolutions in Egypt, Tunisia, Libya and now Syria. It rarely reports on events in Qatar itself.

As a political player, it hosts offices of the Taliban and Hamas. Until 2009 Doha had an Israeli trade centre – closed after that year's Israeli incursion into Gaza.

The handover is no surprise: "We expect to see the continued emergence of crown prince Sheikh Tamim as more than a figurehead, as his father continues to groom him for the highest office in Qatar," the US embassy noted in a secret 2009 cable released by WikiLeaks. "He will increasingly issue more ... decrees under his own authority and take on more symbolic leadership duties."

BARKAN, West Bank — Highlighting the obstacles to Washington’s push to revive the Mideast peace process, Prime Minister Benjamin Netanyahu on Monday made a rare appearance in the West Bank to dedicate an elementary school in a Jewish settlement.

Mr. Netanyahu visited the school, named for his father, three days before Secretary of State John Kerry was scheduled to return to the region for the fifth time in three months, and after two weeks in which right-wing ministers in Israel’s government said the idea of a Palestinian state had reached “a dead end” and promised to block efforts to establish one. While the prime minister ducked questions about the future of West Bank settlements, his presence in the contested territory was itself seized on as an important sign.

“Every time Kerry comes,” Saeb Erekat, the chief Palestinian negotiator, said in an interview, Mr. Netanyahu “does something to undermine the possibility of a Palestinian state. It’s more than provocative, it’s devastating.”

He added: “This government’s policies are disastrous for Palestinians, Israelis and the region. I don’t know what purpose it serves to undermine the two-state solution.”

The settlement, Barkan, a 25-year-old community with 500 families, is part of three large settlement blocs that Israel has demanded be part of its state under any future agreement with the Palestinians. But Palestinian leaders see any activity in the West Bank as a barrier to peace, and Mr. Kerry has urged the Israelis to halt settlement expansion during his diplomatic push.

Israel has not begun any new West Bank developments, though it has moved more than 1,000 approved units closer to construction. Mr. Netanyahu’s visit on Monday was his first public appearance in a settlement since the Jan. 22 elections.

“His being here is enough — his being here says it all,” said David Haivri, a spokesman for the settlers in this area of the northern West Bank. “Netanyahu, by coming here, is making a statement of his commitment toward the development of these communities.”

The awkward timing was reminiscent of an episode in 2010 when Israel announced 1,600 new housing units in East Jerusalem while Vice President Joseph R. Biden Jr. was visiting. A year later, Israel approved new construction in the West Bank and East Jerusalem on the eve of a White House visit by President Shimon Peres, one in a series of such moves that angered Washington.

The State Department declined to comment on Monday.

Mr. Netanyahu met with settlement leaders who oppose a Palestinian state and engaged with third graders about the Zionist zeal of his father, Benzion Netanyahu, who died last year. He visited hours after Israel dropped several bombs on the southern Gaza Strip in response to overnight rocket fire. No injuries were reported in either Israel or Gaza, and the clash may have been set off by an internal dispute between Hamas, the Islamic militant faction that controls Gaza, and the extremist Islamic Jihad group.

A member of Islamic Jihad died Sunday from wounds inflicted when Hamas police officers tried to arrest him in connection with the kidnapping of a Gaza resident. The man was also wanted by Israel. It appeared that the rockets may have been launched by friends of the slain militant, since Islamic Jihad leaders said they remained formally committed to the six-month-old cease-fire with Israel that Hamas has been struggling to preserve.

Invoking the legacy of his father, a hawkish historian who viewed Arabs as “an enemy by essence,” Mr. Netanyahu addressed the exchange with Gaza during his visit here. “Jews must be able to defend themselves, by themselves, and to act with determination, against any enemy that tries to harm us,” he told the schoolchildren.

He did not directly discuss the peace process or West Bank settlements, but said, “We will continue to develop our land.”

“The most important thing is to deepen our roots, because all the rest grows from there,” Mr. Netanyahu added. “We are here today to deepen our roots.”

Many leaders and analysts on both sides expect Mr. Kerry, who has made the Israeli-Palestinian conflict a centerpiece of his agenda, to bring with him this week a concrete plan for restarting talks. Several people close to the process said Washington was trying to reassure Jerusalem on security, in regard to not just the Palestinians but also Syria and Iran, to press Mr. Netanyahu to make concessions that would give his counterpart more flexibility to resume negotiations.

An Israeli news channel reported Monday night that President Mahmoud Abbas of the Palestinian Authority had agreed to return to talks for a limited time, citing unnamed sources, but Xavier Abu Eid, a spokesman for the Palestinians’ negotiations unit, said the report was untrue.

Israel is eager to restart talks in part to fend off mounting European criticism of its West Bank policies. Mr. Abbas, weakened by the recent resignation of his new prime minister and facing intense pressure from his own party to take action against Israel through United Nations institutions, is wary of being seen as negotiating simply for the sake of negotiating.

“It is extremely risky for Abu Mazen to meet with Netanyahu and come back with a failure; the repercussions are going to be very negative,” Ziad Abu Amr, the Palestinian deputy prime minister and a close aide to Mr. Abbas, said in a recent interview, using the president’s nickname. “We want to make sure there are certain guarantees that would ensure the success of any effort.”

Mr. Abu Amr was one of several Palestinian, Israeli and international officials who suggested that Mr. Kerry might issue an invitation for talks based on certain parameters — including the pre-1967 borders with minor adjustments — that would somehow circumvent Mr. Netanyahu’s insistence that there be no preconditions for negotiations. “This is not a routine visit,” he said. “We are expecting him to come with a proposal.”

Tzipi Livni, the Israeli minister in charge of negotiations, also said in a recent interview that Mr. Kerry’s efforts “cannot be endless,” and described the current dynamic between the sides as “icebergs melting into cold water.”

At the school dedication here, Gershon Mesika, a leader of the settlers’ council, pressed Mr. Netanyahu to strengthen settlements, not evacuate them to create a Palestinian state, saying: “Peace does not mean stealing the house and the childhood of a child.”

In a third-grade classroom after the ceremony, the school principal, Sigalit Ben Eli, asked, “How can you ensure the continuation of Zionism here in Samaria?” using the biblical name for this part of the West Bank.

Mr. Netanyahu did not bite, instead quizzing the students on the Holocaust and the Inquisition.

“All sorts of bad things happened to the Jews,” he said. “Why? Because they did not have a country. They did not have a land of their own, they did not have an army of their own.”

He added: “This is what my father saw. If you understand, remember it.”

Isabel Kershner contributed reporting from Jerusalem, Fares Akram from the Gaza Strip, and Michael R. Gordon from New Delhi.

SIDON, Lebanon — Tanks careened through this seaside city, gunfire crackled along near-deserted streets and thick smoke rose from the hilltop neighborhood where followers of a radical Sunni cleric clashed for a second day on Monday with the Lebanese Army, killing at least 12 soldiers. The deaths were the army’s worst losses since the conflict in neighboring Syria began fueling sporadic skirmishes in Lebanon two years ago.

During pauses in the battle, families sped away in packed cars, waving white flags improvised from ripped sheets; one even used a bunch of tissues. Taken by surprise, some residents spent the night pinned down in supermarkets, in their offices, in a KFC chicken franchise.

Though the fighting seemed to have eased by early evening, shaken residents said they feared the clashes — which shut down a religiously mixed city of 200,000, left windows shattered in gleaming downtown malls and pitted the army against a provocative cleric who has played on sectarian tensions — revealed that the country was drifting rudderless toward deepening conflict.

Lebanon’s mainstream political leaders, residents said, appeared powerless or unwilling to rein in the cleric or address his followers’ concerns, leading to a clash they called more dangerous and destabilizing than the perennial battles between supporters and opponents of the Syrian government in the northern city of Tripoli, which have largely been confined to two neighborhoods. In this case, the conflict was rooted in a Lebanese power struggle that resonates throughout the country, a troubling development for a nation that lived through 15 years of sectarian civil war.

In the emergency room of Hamoud Hospital, which received more than 40 wounded soldiers and 10 injured civilians, several stricken-looking surgeons said the fighting felt like the early skirmishes of the civil war in 1975. Asked whether it could be contained, they cast their gaze downward.

“We hope,” one said, as the wail of a woman who had lost her son in the fighting echoed through the corridor.

The army, in a statement, compared the clashes to violence in Sidon that helped start the civil war, accusing members of Sheik Ahmad al-Assir’s militia of starting it on Sunday by killing soldiers at a checkpoint “in cold blood.” Each side accused the other of provoking the initial clash. The army recently set checkpoints near Mr. Assir’s mosque, after clashes erupted between his militia and Hezbollah supporters.

Many Sunnis described themselves as torn — between horror that followers of Mr. Assir had attacked the army, one of Lebanon’s few broadly respected national institutions, and the sense that he gives voice to their feelings of resentment over the dominance of the Shiite Muslim organization Hezbollah. Sunni anger has been magnified by Hezbollah’s military intervention in Syria against an uprising that many Lebanese Sunnis support.

Munir Ghazzoui, a Lebanese-Canadian, huddling with his family inside their apartment without electricity or water as the fighting caused a blackout, said that whoever had killed the soldiers “should be punished,” and condemned a call that Mr. Assir had issued for Sunni soldiers to defect from the army.

But he and his family, who are Sunni, said they had been sympathetic to Mr. Assir, and especially to his condemnations of Hezbollah’s alliance with the Syrian president, Bashar al-Assad. Mr. Ghazzoui’s daughter, Nawal, said the sheik’s fiery sermons “express what every Sunni house is feeling.”

But, she added, “we are against using arms, by anyone.”

By day’s end, the clashes had ended in confusion. Arrest warrants were issued for Mr. Assir and scores of his followers. The army entered the mosque and said it had discovered large stockpiles of weapons, but Mr. Assir was nowhere to be found. There were even reports that he had fled to Syria.

There were conflicting reports, too, about whether Hezbollah, which has close ties with elements of the army, had aided soldiers in the fight. Hezbollah’s news media described the army as acting alone. Some residents said they had seen people they knew to be Hezbollah fighters firing weapons, or moving through neighborhoods with the army. Others reported shelling from an area where Hezbollah has positions.

The wiry, bespectacled Mr. Assir has widely been seen as a fringe provocateur. Largely unknown before the Syrian war, he rose to prominence with media gimmicks like taking busloads of followers to frolic on a snowy ski slope, discomfiting Christian residents or posing with a machine gun in Syria.

The mainstream Sunni party, the Future Movement, led by the powerful Sidon-based family of Rafik Hariri, the former prime minister assassinated in 2005, has often condemned the cleric’s sectarian rhetoric and use of arms, though Hezbollah supporters accuse the party of secretly backing him.

But in Sidon on Monday, even Future supporters said they did not want to see him defeated, suggesting his support may run deeper. One Sunni man said he had been tempted many times to join Mr. Assir’s militia because it made him feel protected “as a Sunni.”

A few blocks away, a Shiite resident and Hezbollah supporter, Inaya Haydar, said Mr. Assir should be arrested, even if it meant heavy fighting.

“Let it take as much as it needs,” Ms. Haydar, a nurse, said after staying up all night to the sounds of gunfire, rocket-propelled grenades and shells and watching from her window as wounded people poured into Hamoud Hospital.

The cleric, she said, had shown his hypocrisy by calling on Hezbollah to disarm its militia, a perennial issue in Lebanese politics. “What is he doing now?” she said. “He is armed too, and against the Lebanese Army.”

Mohamed al-Bizri, a member of the municipal council and a dentist who has cared for Mr. Assir’s wife, said many respectable families supported the cleric, who had played positive roles, such as working against drug abuse.

But politically, he said, Mr. Assir is “a naïve reactionary” who is promoting “segregation” between sects, an idea that he said had no place in a city with a history of coexistence and commerce. Attacking the army, he said, had set back the effort to balance Sunni and Shiite power, but the angst Mr. Assir harnessed remains.

Brazil's middle class is outraged over corruption and the feeling that none of the country's new prosperity is trickling down to them. With the economy stagnating, the country urgently needs reforms.

The Hotel Glória was once Brazil's finest establishment. Heads of state stayed in the magnificent building when Rio de Janeiro was still the capital. But the hotel lost its luster and its high-class clientele. Five years ago, a multibillionaire bought the hotel and vowed to bring back the old glory.

Eike Batista, who was Brazil's richest man at the time, had big plans: He wanted to build a luxury resort, complete with a helipad and marina. He hired star architects and the building was gutted down to its foundation walls. The idea was to reopen the hotel in time for next year's World Cup soccer championship. But now the cranes are standing still and most of the workers have been laid off. The wind blows through the windows and a homeless man is sleeping under an awning. The hotel is for sale. The multibillionaire has run out of money.

The downfall of the Batista empire symbolizes the end of the economic boom -- and the multibillionaire embodies everything that hundreds of thousands of Brazilians, primarily from the middle class, are protesting against: nepotism, delusions of grandeur and the fabulous wealth of a select few. It started with demonstrations against raising the bus fare by 20 centavos (9 US cents), but rapidly became a more general uproar over the issue of who should benefit from Brazil's riches and what is more important -- new hospitals or glittering sports stadiums.

Batista enjoyed close ties with Brazilian President Luiz Inácio Lula da Silva, who extolled him as a model for the new Brazil. He received massive loans from the state, and when his son hit and killed a cyclist with his sports car, expensive lawyers managed to keep the young man from serving a prison sentence. A consortium that included Batista was awarded the contract to manage the rebuilt Maracanã Stadium in Rio. The renovation of the Hotel Glória is also financed with a loan from the state development bank. And Brazil's state-owned Petrobras has signed a deal to make Batista's port facilities more profitable.

The entrepreneur became the seventh richest man in the world in 2012, with a net worth of $30 billion ($23 billion). Then everything collapsed: Stock prices have plummeted in his empire of oil, mining and energy companies. His fortune has melted away to nearly one-third of its former size. He has slipped to 100th place in Forbes magazine's ranking of the world's richest people. Last week alone one of his companies lost 40 percent of its stock market value.

Batista also attracted investors with the prospect of huge oil reserves off Brazil's coast and promised them an increase in infrastructure contracts. But the wells have not supplied as much oil as hoped and many predictions have not materialized. Batista's "X" empire, as he likes to call his consortium, has turned out to be nothing but a pipe dream.

Cultural Impunity

Brazil has always been a permissive society. Those who are rich are rarely held accountable for their crimes. Politicians invoke their parliamentary immunity and there are plenty of kleptocrats in the country's town halls, governor's palaces and the National Congress, the legislative body of Brazil's federal government. According to a cynical Brazilian saying, "tudo acaba em samba" -- everything ends in a samba. For decades, Brazil's rich and powerful have relied on this culture of impunity.

It is also the fury over this mentality that is fueling the wave of protests rolling across the country. But the government has apparently failed to grasp this new development. It has reacted as usual: First, it tried to violently suppress the protests, then it tried to co-opt the protesters. Brazilian President Dilma Rousseff praised the demonstrators, and the mayors of São Paulo and Rio de Janeiro rescinded the bus fare hike.

The protests are rocking the country at a critical moment. The Brazilian economy is starting to falter. Last year, it only grew by 0.9 percent, making Brazil the laggard among the emerging economies known as the BRICS -- Brazil, Russia, India, China and South Africa.

Will the boom of the Lula years now be followed by the Brazilian blues? "The optimism was exaggerated, as is the pessimism," says Ilan Goldfajn, chief economist at Brazil's largest bank, Itaú Unibanco. Rating agencies are predicting economic growth of 2.5 percent for this year. Rousseff is trying to fuel consumption in a bid to kickstart the economy again. She has lowered interest rates, but this approach hasn't been successful. Many Brazilians are deeply in debt. They have purchased homes and cars on credit, and now they have to save money.

A Jump in Inflation

Furthermore, lowering interest rates has led to a rise in inflation, with significant price increases primarily for food and services. For a while, tomatoes were so prohibitively expensive that smugglers brought them into the country over the Argentinean border. Although the government has now raised interest rates again, this move will hardly be enough to stop inflation. The decline of the Brazilian real is continuing to fuel price increases, and imports are becoming increasingly expensive.

The jumps in prices evoke memories of the decades in which the country suffered from high inflation. The construction of the capital Brasília and megaprojects launched by the military dictatorship saddled subsequent democratic governments with a huge mountain of debt. By the mid-1980s, prices had exploded. The Brazilian central bank has introduced five new currencies since then. It wasn't until 1994 that then-Finance Minister Fernando Henrique Cardoso managed to stabilize the economy with a combination of austerity measures and currency reform.

In 2002, when the former labor leader Lula was elected, many investors pulled out their money. They were afraid that Lula would abandon the stability policy of his predecessor. But the left-wing politician surprised the financial world, and there were no socialist experiments. At the same time, there was a rise in global prices for fuel and food, Brazil's main exports. Billions in investments flowed into the country and the real became a highly overvalued currency.

Reforms Mired in Bureaucracy

The government introduced generous social programs for the poor, allowing 20 million Brazilians to climb into the middle class. During his second term in office, though, Lula threw open state coffers to launch megaprojects and grant loans to the poor -- all of which helped the campaign of his successor Rousseff, who used this political capital to win the 2010 presidential election.

Economic experts hoped that Rousseff would return to an orthodox financial policy. Instead, she lowered interest rates and intervened in monetary policy. She has expanded state capitalism in the country and founded a number of new state-owned companies. Meanwhile, important structural reforms have become mired in government bureaucracy. The road network is dilapidated, the ports are run by corrupt trade unions and efforts to expand the airports have bogged down. Even the exploitation of deep-sea oil reserves has stagnated due to a lack of technology. In 2006, Lula proudly announced that Brazil would achieve self-sufficiency thanks to its crude oil production. Now, gasoline and ethanol have to be imported.

Not much happens without the government in Brazil and, not surprisingly, corruption continues to flourish. The renovation and new construction of sports facilities for the World Cup and the Olympic Games was negotiated with only a handful of large contracting companies, and the projects are billions over budget. This wheeling and dealing between the government and companies is yet another reason why the middle class is up in arms.

'Brazil Costs'

Along with the poor and students, a large number of business people are taking to the streets. Shop owners and cab drivers have spontaneously joined the demonstrations. "There's plenty of money -- we pay enormous amounts of taxes," says Raoni Nery, 27, who joined the protest marches in Rio, "but we don't receive anything in return."

The computer expert runs a small IT company and would like to hire someone to help: "But I can't afford it because social security contributions are too high. Our employment legislation is totally outdated," he says. It takes months to establish a company, and nobody seems to understand the maze of laws and regulations. Anyone who wants to open a business often has to pay bribes to inspectors from the city administration.

Large companies write off special expenses for transport, bureaucracy and corruption as "custo Brasil," meaning "Brazil costs." Ultimately, it's the customers who pay for this.

In view of the upcoming presidential election next year, the government is again opening its coffers. Two weeks ago, President Rousseff announced a special election present: Anyone who has been granted a low-interest state loan for a house can acquire an additional low-cost loan of up to 5,000 reais -- to purchase appliances and furniture.

Rapid growth in the sector is evidence of Mexico's determination to become one of the world's top 10 aviation suppliers

Frédéric Saliba Guardian Weekly, Tuesday 25 June 2013 11.39 BST

The Querétaro Aerospace Park, 200km northwest of Mexico City, is a mass of cranes and diggers. A new Aeroméxico and Delta Air Lines heavy maintenance facility – a joint investment costing $40m, with work for 3,000 specialist technicians – is due to open here shortly. Querétaro airport is just next door, with gigantic hangars built by Bombardier, Eurocopter and Safran, rearing up against the arid landscape dotted with cactuses.

Mexico is determined to become one of the world's top 10 aviation suppliers. In 2005 Canada's Bombardier was the first overseas firm to build a $200m factory on previously undeveloped land, transferring production here from Ireland and Japan. Since then it has spent a further $300m in Mexico. The 1,800-strong workforce manufactures parts for the Learjet 85, soon to be followed by components for the Global 7000 and 8000 series.

In February, Eurocopter, the latest arrival, opened a 12,000 sq metre facility that will employ 200 people by next year. The EADS subsidiary invested $100m to produce helicopter tail-booms and doors for Airbus A320 and A330s. It plans to invest $500m more over the next 15 years. "The future Airbus production unit at Mobile, Alabama [in the US], opens the way for major developments," says Serge Durand, head of Eurocopter in Mexico.

Neither Airbus nor Boeing have settled south of the border yet, but they are encouraging their suppliers to do so. Among their number, the French conglomerate Safran is leading the way. In 2012 it opened an engine workshop at Querétaro and it is now Mexico's largest aerospace firm, with 4,000 staff.

Meanwhile the French composite materials specialist Duqueine plans to open a factory, and two Spanish firms, Turbo Propulsores and Aeronova, have also been attracted to the area. So too has General Electric, with its largest R&D centre, employing 1,300 engineers.

But the aviation heavyweights are not only operating in Querétaro. In May, Safran opened a fourth facility at Chihuahua, near the US border. Brazil's Embraer, the world's third-largest aircraft manufacturer, and French equipment manufacturer Zodiac also have plans for a joint production facility in the area. The industry has seen 20% annual growth in Mexico since 2006.

"Our country is attracting the biggest share of aerospace investment worldwide," says Carlos Bello Rocha, head of Mexico's Aerospace Industry Federation (Femia). About 20 new projects are expected this year, worth $1.3bn. Aviation exports doubled between 2009 and 2012 to reach $5.4bn.

Femia forecasts that there will be 450 companies working in this field by 2020, representing 110,000 jobs and $12bn in export sales. "With 14% average growth projected for the coming years, Mexico will rank 10th among aerospace suppliers by the end of the decade," Bello Rocha claims. "The country's main asset is that it borders the US, the top market for commercial and military aviation. Being so close enables us to deliver parts in eight days at the most, compared with more than 20 in Asia," says Alfredo Nolasco, spokesman for Bombardier Mexico.

The North American Free Trade Agreement, which has linked the US, Canada and Mexico since 1994, is obviously an appreciable asset too, lifting customs duty on trade between these countries. Furthermore, by moving production into the dollar zone, firms can overcome the problems posed by the high value of the euro and currency exchange risks. The other key advantage of relocating to Mexico is the low manufacturing costs, particularly wages. "In Mexico a technician earns between $500 and $700 a month, an engineer $900 to $2,000, roughly 30% less than their US counterparts," Bello Rocha emphasises. "But though labour is cheap, it is nevertheless highly qualified."

In 2007 Mexico ratified an agreement with the US enabling it to validate its certification processes. It has also just joined the Wassenaar Arrangement, which manages controls on arms exports, giving it access to the market for military technology. But there are still major challenges to be overcome, according to Marcelo López Sánchez, minister of sustainable development in Querétaro state: "Our country lacks small- and medium-sized enterprises to shorten the supply chain, so spare parts go back and forth between us and the US." Barely 10% of all raw materials are sourced in Mexico. Not only is there a shortage of titanium, carbon fibre and other metals, even brain power is lacking, with an estimated 20% shortfall in specialist technicians.

Femia is banking on training to solve the problem, in particular at the Aeronautics University of Querétaro (UNAQ). Located conveniently close to the airport and the Bombardier facility, it opened in 2007.

The other priority is to attract recently launched Mexican SMEs, by upgrading their skills and certifications. To fuel this trend an aerospace testing and technology laboratory – the first of its kind in Latin America – will be opening later this year, on land adjoining the UNAQ campus. It will have a budget of $90m, with the European Union contributing almost a third.

This article appeared in Guardian Weekly, which incorporates material from Le Monde

Angelina Jolie made her debut before the UN's most powerful body as a special envoy for refugees on Monday and urged the world's nations to make the fight against rape in war a top priority.

The actor told the security council that "hundreds of thousands if not millions of women, children and men have been raped in conflicts in our lifetimes".

Jolie, a goodwill ambassador for the UN high commissioner for refugees, said the security council has witnessed 67 years of wars and conflict since it was established "but the world has yet to take up warzone rape as a serious priority".

"You set the bar," she told the council. "If the … council sets rape and sexual violence in conflict as a priority it will become one and progress will be made. If you do not this horror will continue."

The British foreign secretary, William Hague, who presided over the meeting, stressed that "in conflicts in nearly every corner of the globe, rape is used systematically and ruthlessly, in the almost certain knowledge that there will be no consequences for the perpetrators".

Soon after Jolie spoke the council adopted a legally binding resolution demanding the complete and immediate cessation of all acts of sexual violence by all parties to armed conflict. It noted that sexual violence can constitute a crime against humanity and a contributing act to genocide, called for improved monitoring of sexual violence in conflict, and urged the UN and donors to assist survivors.

It was the broadest resolution adopted by the council on the sexual violence in conflict. Hague said Britain planned to follow up by convening a global gathering during the annual general assembly meeting of world leaders in September to keep up the pressure for action.

Hague said at a discussion later at the Ford Foundation that his prime motivation for pressing for global action against sexual violence was the 1990s war in Bosnia, partly because of an adviser but also because of Jolie's 2011 film, In the Land of Blood and Honey, about former lovers who end up on the opposite sides of the conflict. He said he arranged the film's British premiere at the foreign office and had been campaigning with Jolie since then, including a visit to Congo in March, "to move the stigma and the shame from the victim to the perpetrator".

"The time has come for the world to take a strong and determined stand to make clear that the systematic use of rape as a weapon is not acceptable in the modern world and our objective is to change the entire global attitude to these issues," Hague said.

Getting the whole world talking about sexual violence in conflict and the need to punish perpetrators not victims "will shift attitudes maybe over a period of years, but we have begun", he said.

Jolie, who has travelled extensively in her role as goodwill ambassador, recalled several of the survivors she had met the mother of a five-year-old girl raped outside a police station in Goma in eastern Congo, and a Syrian woman she spoke to in Jordan last week who asked to hide her name and face "because she knew that if she spoke out about the crimes against her she would be attacked again, and possibly killed".

"Let us be clear what we are speaking of: young girls raped and impregnated before their bodies are able to carry a child, causing fistula," Jolie said, referring to an injury caused by violent rapes that tear apart the flesh separating the bladder and rectum from the vagina, leaving the girls unable to control their bowels or bladder.

She continued: "Boys held at gunpoint and forced to sexually assault their mothers and sisters. Women raped with bottles, wood branches and knives to cause as much damage as possible. Toddlers and even babies dragged from their homes and violated."

Zainab Hawa Bangura, the UN special envoy on sexual violence in conflict, told the council that two weeks ago she visited Bosnia where an estimated 50,000 women were victims of rape and other forms of sexual violence during the war, but only a handful of perpetrators have been prosecuted.

Later, at the Ford Foundation, she said that on an African trip with Hague she visited the village of Mambasa in eastern Congo's Ituri district where 11 babies aged six to 12 months had been raped, 59 children aged one to three years old had been raped and 182 girls aged five to 15 years old had been raped.

"Who will rape a baby?," Bangura asked. "It means you want to wipe the community away. That's the only explanation you can have."

Jolie pleaded with the security council and all countries to implement the resolution and not let the issue drop. "Meet your commitments, debate this issue in your parliaments, mobilise people in your countries and build it into all your foreign policy efforts," she said. "Together you can turn the tide of global opinion, shatter impunity and finally put an end to this abhorrence."

The UN secretary general, Ban Ki-moon, paid tribute to Jolie for being the voice of millions forced to flee their homes "and now for the many survivors of wartime rape whose bodies have been used as battlegrounds".

He called on all leaders to apprehend and prosecute perpetrators "and be part of a global coalition of champions determined to break this evil".

The words “occupy,” “progressive,” and “Israel” appeared on a “Be On the Look Out” (BOLO) list used by the U.S. Internal Revenue Service, according to media reports.

“When I got to the IRS, we started a more comprehensive review of the operations of this part of the IRS, have been looking at documents and business operations, and we did determine and discover that there are other BOLO lists in place,” acting IRS commissioner Danny Werfel told the Huffington Post. “And upon discovering that, we also found that we believed there continued to be inappropriate or questionable criteria on these BOLO lists.”

Werfel said he suspended the use of such lists immediately after becoming the acting IRS chief last month. An internal review has failed to find evidence of intentional wrongdoing, he told reporters, but is still ongoing.

The BOLO lists were at the heart of a scandal involving the treatment of tea party groups who applied for tax exempt status. An inspector general audit (PDF) released in May found the IRS had inappropriately targeted tea party groups for additional review based solely on their name.

Following the report, Republicans have claimed the IRS was intentionally targeting the enemies of President Barack Obama. Conservatives held an “Audit the IRS” rally in Washington, D.C. last week to speak out against the allegedly corrupt practices of the federal tax agency.

But a November 2010 BOLO (PDF) released by Rep. Sander Levin (D-MI) on Tuesday mentioned both progressive and tea party groups.

“The audit served as the basis and impetus for a wide range of Congressional investigations and this new information shows that the foundation of those investigations is flawed in a fundamental way,” Levin said in a statement.

IRS officials have repeatedly denied the BOLO was used to single out tea party groups for additional scrutiny.

IRS manager John Shafer, a self-identified “conservative Republican,” told congressional investigators the BOLO list was merely used to centralize particular applications. Screeners who flagged applications related to “tea party” groups sent the case to particular IRS agents to ensure the review of such groups was consistent. Far from “targeting” the groups, he said they were centralized to improve customer service. Just because a group was on the BOLO list didn’t mean they were automatically flagged for review, he claimed.

“The major use of the BOLO was after the screening process,” he explained.

His testimony was consistent with what Lois Lerner, the IRS director of exempt organizations, revealed in May. She said tea party applications were centralized “for efficiency and consistency,” but that doing so was inappropriate.

“This was a streamlined way for them to refer to the cases,” she explained. “They didn’t have the appropriate level of sensitivity about how this might appear to others and it was just wrong.”

At a congressional hearing about a week later, outgoing acting IRS commissioner Steve Miller repeatedly objected to the use of the word “targeting.” He claimed the BOLO list was an “inappropriate” organizational tool or “shortcut” that IRS staff used, noting the majority of applications identified as being subjected to additional scrutiny were not tea party groups.

WASHINGTON (Reuters) – The Obama administration has spent the past few weeks arguing it can wield power responsibly after Edward Snowden unveiled its sweeping spying programs. Now the administration must prove it can wield power effectively.

As the 30-year-old leads the world’s lone superpower on a global game of hide and seek, U.S. government officials faced questions about whether they had botched the effort to extradite Snowden from Hong Kong to face charges related to his leak of classified information.

The latest wrinkle in the Snowden saga poses a different set of questions for an administration that has spent weeks fending off questions about whether it has abused its power to collect taxes, investigate criminal activity and fight terrorism.

On Monday, administration officials said they had done all they could to bring Snowden to justice. Chinese defiance, rather than bureaucratic bungling, had allowed the 30-year-old former contractor to slip out of Hong Kong as officials there weighed Washington’s request for extradition, they said.

“This was a deliberate choice by the government to release a fugitive, despite a valid arrest warrant,” White House spokesman Jay Carney said at a briefing.

Carney said early Monday afternoon that it was the U.S. assumption that Snowden was still in Russia after fleeing Hong Kong for Moscow over the weekend.

Other administration officials tried to dispel any notion of foot-dragging since Snowden first went public on June 9, and dismissed suggestions that they could have taken other steps to detain Snowden, who had gained access to highly sensitive information as a contract systems administrator at a National Security Agency facility in Hawaii.

Snowden’s exact whereabouts were a mystery on Monday as Russia resisted White House pressure to stop him during his journey to escape U.S. prosecution.

Reporters staking out an Aeroflot flight to Havana from Moscow on Monday, saw no sign of Snowden. The captain told reporters on emerging from customs: “No Snowden, no.”

Ecuador said it was considering Snowden’s request for asylum, and advocates in the anti-secrecy group WikiLeaks were also asking Iceland to take him in.

Snowden’s decision to go on the lam creates another headache for the Obama administration, which has seen priorities like immigration reform threatened by a string of scandals.

Republicans in Congress say the Obama administration has abused its power by targeting conservative groups for heavy-handed tax scrutiny and seizing reporters’ phone records in the process of investigating security leaks.

When it comes to the NSA revelations, most lawmakers were already aware of the surveillance program and few have raised objections. Republicans by and large have focused their criticism on Snowden and China rather than the administration.

That may change if the ordeal drags on. Republican Representative Peter King of New York on Monday said Obama should have taken a harder line with the Chinese authorities who ultimately control the semi-autonomous region of Hong Kong.

“I hate to be in the middle of a crisis second guessing the president, but where is he? Where is the president? Why is he not speaking to the American people? Why is he not more forceful in dealing with foreign leaders?” King said on CNN television.

There are also likely to be increasingly embarrassing questions about how Snowden managed to download and take many highly sensitive documents when he was working in Hawaii for NSA contractor Booz Allen Hamilton. The head of the NSA, General Keith Alexander, said on Sunday that he did not know why the NSA did not catch Snowden before he left Hawaii for Hong Kong in May.

WHITE HOUSE STEERS CLEAR

Obama first learned that Snowden had turned up in Hong Kong on Sunday, June 9, as he flew back from a weekend of talks with Chinese President Xi Jinping.

But Obama does not appear to have played a direct role in trying to get him back. Obama declined to say on Monday whether he has spoken directly with Russian President Vladimir Putin or other foreign leaders about the extradition efforts. Obama had an icy meeting with Putin a week ago at the G8 summit in Northern Ireland.

“We’re following all the appropriate legal channels and working with various other countries to make sure the rule of law is observed,” Obama told reporters at an unrelated event on Monday on immigration reform.

Obama’s public schedule leaves little room for the extradition effort. He makes a major speech on climate change on Tuesday, and then leaves on a week-long trip to Africa.

Michael Chertoff, a former Homeland Security Secretary under Republican President George W. Bush, said extradition laws are riddled with loopholes and the United States has a limited ability to get other countries to do what it wants.

“You can do all the paperwork, but it becomes a question of leverage,” he said. “Either they didn’t have enough, or they didn’t exercise enough.”

Though the White House has distanced itself from the Snowden affair, other agencies have taken pains to show that they have done all they could to bring Snowden back to face charges.

The Justice Department said it had filed espionage and theft charges against Snowden on June 14, one week before it made the charges public, and asked Hong Kong to arrest Snowden the next day.

Officials from the FBI, the Justice Department and the State Department worked with their counterparts in Hong Kong to extradite Snowden over the next several days, culminating in a telephone call between U.S. Attorney General Eric Holder and Hong Kong’s Secretary for Justice, Rimsky Yuen, on June 19.

“There was a sense that the process was moving forward,” a Justice Department official said, speaking on condition of anonymity.

Hong Kong officials asked for more information and evidence two days later, but did not give the United States enough time to respond before Snowden left the Chinese territory on June 23.

Administration officials dismissed suggestions that they had mishandled the extradition effort. Using a so-called “red notice” to ask Interpol, the international police organization, for help was unnecessary because Snowden should not have been able to leave Hong Kong if his passport had been revoked, a Justice Department official said.

U.S. officials said privacy laws prevent them from describing the status of any individual’s passport, but Carney hinted that it had indeed been revoked.

“Hong Kong authorities were advised of the status of Mr. Snowden’s travel documents in plenty of time to have prohibited his travel,” he said.

George Terwilliger, who served as the Justice Department’s No. 2 official under President George H.W. Bush, said it was too early to know whether the agency should be blamed for failing to get Snowden.

“These are not legal issues, per se. They’re political and diplomatic issues, and most of the skills that are exercised are exercised away from the public eye.”

Hopes of securing a landslide Senate vote in favour of immigration reform were hampered by summer storms on Monday night after several lawmakers were prevented from flying to Washington in time for a key vote.

Nevertheless, the efforts to legalise an estimated 11 million undocumented migrants in the US received a much-needed shot in the arm as 15 Republicans voted in favour of allowing a compromise bill that would toughen border security in exchange for the so-called amnesty.

In total 67 senators voted in favour of proceeding with the revised immigration bill, which includes a border security amendment proposed by moderate Republicans and dubbed a “human fence” or “border surge” because it would double border guard numbers to 40,000.

Twenty seven Republicans voted against the so-called cloture motion, which requires 60 votes to pass and move the bill forward to a final Senate vote this Thursday.

Nevertheless, despite holding open Monday’s cloture vote for over an hour to allow for late arrivals delayed by the weather, the Democrat leadership was unable to reach the symbolic 70 votes it had hoped for, with six of the 100 senators absent from the chamber.

Though the target figure of 70 is entirely arbitrary, it points to the biggest challenge facing the bill, which is demonstrating enough Republican support to stand a chance of passage in the much more sceptical House of Representatives.

Democrats and those Republicans behind the bill, such as Marco Rubio and John McCain, hope to convince colleagues in the House that support from immigration reform represents mainstream Republican thinking – particularly after a poor-showing for the party among immigrant groups at the last election.

Anger is growing however among more conservative Republicans at what they see as steam-roller tactics by the party leadership on a matter that is viewed as unpopular among many white voters.

Senator Ted Cruz questioned why there was such a “mad rush to pass a bill” before recess on July 4 when only nine of the dozens of other amendments had even been debated. “Why are we proceeding gangbusters?” he asked. “This amendment is only to tell gullible constituents we have done something. This amendment provides legalisation first and maybe border security maybe later.”

Cruz accused the bill’s backers of not giving senators time to read its more than 1,000 pages since it was redrafted to include the amendment on Friday.

Democrat sponsor Chuck Schumer insisted only 100 pages contained new material. “Senators ought the able to read 100 pages over the weekend,” he said.

The crunch Senate vote will now take place on Thursday before the action moves to the House.

On Tuesday President Obama is holding a meeting with Congressional leaders from both parties during which the immigration reform bill is likely to take centre stage.

Twenty thousand new border patrol agents, hundreds of miles of fencing, billions of dollars in drones, radar and sensors: US lawmakers are proposing a militaristic remedy to staunch illegal immigrant flow from Mexico.

The Senate is expected Monday to green-light the most important amendment yet to the landmark immigration bill, but the measure — designed to placate Republican concerns about security — would ensure that the border region is one of the most highly policed zones in the Western Hemisphere.

Critics call the plan “border security on steroids,” while even the amendment’s Republican author concedes the measures to clamp down on illegal crossings might be “overkill.”

With the amendment’s likely approval, the most sweeping immigration reform in nearly three decades is set for Senate passage. It then heads to the House of Representatives where it faces an uncertain fate, although optimists are hoping the bill becomes law this year.

The goal: bring 11 million immigrants living illegally in the United States, most of them Mexican, out of the shadows with a 13-year-long pathway to citizenship; reform the work visa system in agriculture and high-technology fields; and institute electronic employment verification and comprehensive entry-exit tracking.

But to boost chances for President Barack Obama to become the first US leader to enact major immigration reform since Ronald Reagan in 1986, his Democrats have increased concessions to Republicans to ensure that authorities can prevent a new wave of illegal immigrants.

Under the compromise, crafted by Republican Senators Bob Corker and John Hoeven, the number of federal border agents will surge from about 18,000 today to 38,405, the equivalent of about 19 agents per mile (12 per kilometer) along the 1,954-mile (3,200-km) border.

In 2002, there were just 10,000 assigned agents.

Lawmakers supporting the deal want the 299 miles of existing anti-vehicle barriers on non-tribal lands converted into more secure “pedestrian fencing.”

They also want 50 new miles of fencing put in place, for a total of 700 miles of the high fencing. Some of the fencing includes a stretch along the Rio Grande, which forms a 1,255-mile natural boundary between Mexico and the US state of Texas.

The amendment details a beefed-up arsenal of equipment with a budget of $3.2 billion for four unmanned drone systems; 40 helicopters; 30 boats; 4,595 unattended ground sensors with seismic, imaging and infrared capability; and hundreds of fixed cameras and mobile surveillance systems.

“Hundreds of American communities” militarized

———————————————-

“Is it more than I would have recommended? Honestly, yes,” Senator John McCain, one of four Republicans who crafted the underlying bill along with four Democrats, told Fox News on Friday. “But we’ve got to give people confidence.”

In Washington, the “border surge” proposal is already being compared with the “surge” of US war troop reinforcements that president George W. Bush ordered to Iraq in 2007.

“That military reference makes sense because it is going to militarize hundreds of American communities in the Southwest,” said veteran Senate Democrat Patrick Leahy.

He sneered that the border security modification “reads like a Christmas wish list for Halliburton,” one of the nation’s largest defense and energy contractors.

But the flood of protections was a primary condition some Republicans demanded for joining most of the 54 Democratic senators as they seek an overwhelming majority of 70 votes in the 100-seat chamber to give the bill momentum heading to the House.

“This is about politics, not about the facts on the ground,” Doris Meissner, director of the US Immigration Policy Program at the Migration Policy Institute, told AFP.

Apprehension numbers are at their lowest in 40 years, she noted, thanks in part to investments made since the September 11 attacks of 2001.

But the Corker-Hoeven deal insists on dramatically ramping up the militaristic technology along the border, including use of the ominously named VADER radar — first used to track insurgents in Afghanistan — to find people hiding in the desert.

“It’s almost overkill,” Corker himself admitted.

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U.S. Conference of Mayors asks Obama for flexibility on marijuana

By Stephen C. WebsterRawStoryMonday, June 24, 2013 16:02 EDT

The United States Conference of Mayors unanimously passed a historic, bipartisan resolution Monday calling on the Obama administration to stop interfering with state and local efforts to deal with the problems caused by marijuana prohibition.

“This resolution will amplify the voices of local officials and voters who are sick and tired of President Obama’s administration doing the exact opposite of what candidate Obama said he was going to do, which was respect state marijuana laws,” Tom Angell, spokesperson for drug reform advocacy group Marijuana Majority, told Raw Story in an email.

The resolution (PDF), co-sponsored by mayors from 18 cities including Oakland, San Diego, Tacoma, Alexandria and Las Vegas, lays out a long list of grievances against marijuana prohibition. The resolution’s primary sponsor was San Diego Mayor Bob Filner (D), pictured above.

It specifically focuses on the dominance of organized crime in the black market, racial disparities in arrest statistics, state laws that clearly express an unwillingness to continue marijuana prohibition and recent polling that favors letting states decide the matter.

The resolution adds that the mayors wish marijuana were reclassified under the schedule of controlled substances, which would allow more medical research into drugs based on marijuana and permit more finely tailored laws regulating production and sales. It also calls for the Controlled Substances Act to be amended so as to allow “states and localities” the autonomy to “set their own marijuana policies without federal interference.”

“BE IT FURTHER RESOLVED that the United States Conference of Mayors recognizes that its members have differing views on how to treat marijuana in their cities, and believes that states and localities should be able to set whatever marijuana policies work best to improve the public safety and health of their communities,” they conclude.

Mason Tvert, communications director for The Marijuana Policy Project, praised the resolution, calling it a rhetorical stand in defense of the millions of voters who believe drug laws should be reformed and marijuana should be regulated.

“We commend the U.S. Conference of Mayors for taking action in defense of state and local efforts to move beyond the failed policy of marijuana prohibition,” he said in an advisory. “Our nation’s marijuana policy should reflect the facts about marijuana. If our federal government is unwilling to adopt evidence-based marijuana laws, it is up to states and localities to pick up the slack.”

Marijuana Majority’s Tom Angell echoed that sentiment, saying: “I sincerely hope and believe that when mayors across the country speak with one unanimous voice and demand that the feds give them the opportunity to implement their cities’ forward-thinking marijuana laws that it’ll finally give the president the encouragement he needs to sit down and seriously reconsider his administration’s approach to this issue.”

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June 24, 2013

Justices Step Up Scrutiny of Race in College Entry

By ADAM LIPTAKNYT

WASHINGTON — Courts must take a skeptical look at affirmative-action programs at public colleges and universities, the Supreme Court ruled Monday, in a decision that is likely to set off a wave of challenges to race-conscious admissions policies nationwide.

The 7-to-1 decision avoided giving a direct answer about the constitutionality of the program, used by the University of Texas at Austin, that was before the court.

The program will continue for now, but the justices ordered an appeals court to reconsider the case under a demanding standard that appears to jeopardize the program.

The ruling was simultaneously modest and significant, and its recalibration of how courts review the constitutionality of race-conscious decisions by the government will reverberate beyond higher education.

The brief decision, issued eight months after the case was argued, was almost surely the product of intense negotiations among the justices.

The compromise that the majority reached was at least a reprieve for affirmative action in higher education, and civil rights groups that had feared for the future of race-conscious admission programs were relieved. Conservatives and other opponents of the current version of affirmative action vowed to use the court’s ruling as a road map to bring future cases.

Justice Anthony M. Kennedy wrote the majority opinion, joined by the four members of the court’s conservative wing — Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Clarence Thomas and Samuel A. Alito Jr. — and two of its liberals, Justices Stephen G. Breyer and Sonia Sotomayor.

Only Justice Ruth Bader Ginsburg dissented, writing that lower courts were correct to uphold the Texas program. Justice Elena Kagan disqualified herself from the case, presumably because she had worked on it as solicitor general in the Obama administration.

The decision did not disturb the Supreme Court’s general approach to affirmative action in admissions decisions, saying that educational diversity is an interest sufficient to overcome the general ban on racial classifications by the government. But the court added that public institutions must have good reasons for the particular methods they use to achieve that goal.

Colleges and universities, Justice Kennedy wrote for the majority, must demonstrate that “available, workable race-neutral alternatives do not suffice” before taking account of race in admissions decisions.

That requirement could endanger the Texas program when it is reconsidered by the United States Court of Appeals for the Fifth Circuit, in New Orleans. The university’s program admits most undergraduates under race-neutral criteria, accepting all Texas students who graduate near the top of their high school classes. But the university also uses a race-conscious system to choose the remaining students.

Courts reviewing government programs that make distinctions based on race subject them to a form of judicial review known as “strict scrutiny,” requiring the government to identify an important goal and a close fit between means and ends. Justice Kennedy’s opinion focused on and tightened the second part of the test.

“Strict scrutiny,” Justice Kennedy wrote, “does not permit a court to accept a school’s assertion that its admissions process uses race in a permissible way without a court giving close analysis to the evidence of how the process works in practice.”

Courts reviewing affirmative action programs must, he wrote, “verify that it is necessary for a university to use race to achieve the educational benefits of diversity.” That requires, he said, “a careful judicial inquiry into whether a university could achieve sufficient diversity without using racial classifications.”

Justice Ginsburg, who announced her dissent from the bench, said the race-neutral part of the Texas program worked only because of “de facto racial segregation in Texas’ neighborhoods and schools.”

The case, Fisher v. University of Texas, No. 11-345, arose from a lawsuit filed by a white woman, Abigail Fisher, who said the university had denied her admission based on her race.

In a statement issued Monday, Ms. Fisher said she was “grateful to the justices for moving the nation closer to the day when a student’s race isn’t used at all in college admissions.”

William C. Powers Jr., the university’s president, said in a statement that the university would continue to use its program and defend it in court. “We remain committed to assembling a student body at the University of Texas at Austin that provides the educational benefits of diversity on campus while respecting the rights of all students and acting within the constitutional framework established by the court,” he said.

The admissions system that Ms. Fisher challenged is idiosyncratic. Three-quarters of applicants from Texas are admitted under a program that guarantees admission to the top students in every high school in the state. (Almost everyone calls this the Top 10 program, though the percentage cutoff can vary by year. Ms. Fisher just missed the cutoff.)

The remaining Texas students and those from elsewhere are considered under standards that take account of academic achievement and other factors, including race and ethnicity. Many colleges and universities admit all of their students on such “holistic” grounds. The question in the case decided Monday was whether Texas was entitled to supplement its race-neutral Top 10 program with a race-conscious holistic one.

The Top 10 program has produced significant racial and ethnic diversity. In recent years, about 25 percent of freshmen who enrolled under the program were Hispanic, and 6 percent were black. Thirty-eight percent of Texans are Hispanic, and 12 percent are black.

Monday’s decision let stand, for now, a longstanding but fragile societal compromise, one that forbids quotas but allows using race as one factor among many in the admissions process. That was the essential message of the court’s two earlier major encounters with the issue, University of California v. Bakke, in 1978, and Grutter v. Bollinger, in 2003.

The pursuit of educational diversity, a five-justice majority said in the Grutter case, permits admissions personnel at public universities to do what the Constitution ordinarily forbids government officials to do — to sort people by race.

The opinion, by Justice Sandra Day O’Connor, went on to say that the day would come — “25 years from now” — when “the use of racial preferences will no longer be necessary” in admissions decisions to foster educational diversity.

Justice O’Connor, who retired in 2006, was in the courtroom on Monday, as was Justice John Paul Stevens, who retired in 2010.

The new decision’s reasoning applies to all public colleges and universities. Under Title VI of the Civil Rights Act of 1964, which forbids racial discrimination in programs that receive federal money, most private institutions of higher education would seem to be covered as well.

Justice Kennedy, in describing the additional work that courts must now do, gave a new twist to an adage. He wrote, quoting earlier decisions, that “strict scrutiny must not be ‘strict in theory, but fatal in fact.’ ”

“But the opposite is also true,” he continued. “Strict scrutiny must not be strict in theory but feeble in fact.”

This article has been revised to reflect the following correction:

Correction: June 24, 2013

An earlier Web address and page title misstated the Supreme Court’s ruling. As the headline correctly noted, the justices sent the case back to a lower court.

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June 24, 2013

Justices to Hear Case on Obama’s Recess Appointments

By ADAM LIPTAKNYT

WASHINGTON — The Supreme Court on Monday agreed to decide whether President Obama violated the Constitution last year when he bypassed the Senate in making three recess appointments to the National Labor Relations Board.

The court will review a January decision from a three-judge panel of a federal appeals court in Washington that ruled against the administration on very broad grounds, calling into question the constitutionality of many recess appointments by presidents of both parties.

The appeals court judges agreed that presidents may avoid the usual Senate confirmation process only during the recesses between formal sessions of Congress, which generally happen once a year. Two of the judges went further and said that presidents may fill only vacancies that arose during that same recess.

If the Supreme Court agrees on both points, it would markedly narrow the president’s recess appointment power.

In asking for Supreme Court review in the case, National Labor Relations Board v. Noel Canning, No. 12-1281, the administration sought an answer to only the broader questions decided by the appeals court. A decision in the administration’s favor on those points would leave open the more focused question of when appointments are proper during other breaks in the year.

But the Supreme Court, acting on the suggestion of the company that had won before the appeals court, agreed to answer a narrower question, too: whether the president may make recess appointments when the Senate is convening every three days in pro forma sessions. Though it had won in lower court rulings, the company, Noel Canning, did not oppose Supreme Court review.

If Mr. Obama’s appointments to the labor board were not valid, it lacked a quorum to make decisions, including one finding that Noel Canning, a soft drinks bottler, had violated the National Labor Relations Act by refusing to sign a labor contract it was said to have agreed to orally.

In its brief urging the justices to hear the case, the administration said that the appeals court’s ruling “threatens a significant disruption of the federal government’s operations — including, most immediately, those of the National Labor Relations Board.” The ruling, the brief said, “potentially calls into question every final decision of the board since Jan. 4, 2012.”

More broadly, the brief said, “the limitations imposed by the court of appeals would render many of the recess appointments since the Second World War unconstitutional.”

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Obama to Outline Ambitious Plan to Cut Greenhouse Gases

By JOHN M. BRODERPublished: June 25, 2013

WASHINGTON — President Obama will propose a sweeping plan to address climate change on Tuesday, setting ambitious goals and timetables for a series of executive actions to reduce greenhouse gas pollution and prepare the nation for the ravages of a warming planet.

The plan, to be announced in a policy address at Georgetown University, is the most far-reaching effort by an American president to address what many experts consider the defining environmental and economic challenge of the 21st century. But it also could provoke a backlash from some in Congress and in states dependent on coal and other industries, who will say that it imposes costly, job-killing burdens on a still-fragile economy.

In a speech in Berlin last week, Mr. Obama called climate change “the global threat of our time” and promised swift action to avert it. The plan to be announced on Tuesday represents his first serious effort to engage the problem since he threw his support behind a Democratic cap-and-trade proposal in the House in 2009 to reduce carbon-dioxide emissions. That legislation died in the Senate in 2010.

None of what the president plans to propose will require action by Congress, which has shown no appetite for dealing with global warming and its attendant energy challenges in a comprehensive way. But some of what the president hopes to accomplish is likely to face legal and political challenges, including the possible use of a rarely used law that allows Congress to overturn executive branch regulations.

Top-level White House aides and cabinet officers have been working on the climate plan for months to support the “conversation” on climate change that Mr. Obama promised shortly after he was re-elected last November.

White House aides said the timing for Mr. Obama’s speech had been set weeks ago. But the initiative is likely to be at least somewhat drowned out by a rush of competing and compelling news: a series of major Supreme Court decisions; the drama over the travels of the National Security Agency leaker Edward J. Snowden; a debate in Congress on comprehensive immigration reform; and the failing health of Nelson Mandela, the former South African president.

Mr. Obama leaves for a weeklong trip to Africa the day after the climate speech.

Aides said Mr. Obama would propose the first limits on carbon pollution from existing power plants and would promise to complete pending rules for new plants. He will direct the Environmental Protection Agency to work with states and industries to devise standards for emissions of carbon dioxide and other heat-trapping gases from existing power plants by June 2014, the aides said, and will finalize the rules in June of the following year.

The president will also direct the agency to complete standards for new fossil fuel power plants by the end of September. The rules, first proposed in April 2012, were supposed to be completed by April but are being rewritten to address potential legal and technical problems.

Daniel P. Schrag, a geochemist who is the head of Harvard University’s Center for the Environment and a member of a presidential science panel that has helped advise the White House on climate change, said he hoped the presidential speech would mark a turning point in the national debate on climate change.

“Everybody is waiting for action,” he said. “The one thing the president really needs to do now is to begin the process of shutting down the conventional coal plants. Politically, the White House is hesitant to say they’re having a war on coal. On the other hand, a war on coal is exactly what’s needed.”

The administration will also begin a new round of fuel efficiency standards for heavy-duty trucks to continue improvements already in effect for model years 2014-18. The plan includes new efficiency targets for appliances and buildings to cut carbon pollution by three billion metric tons cumulatively by 2030, equivalent to half of a full year’s total emissions.

The president will commit to $7 billion in financing for international climate mitigation and adaptation projects, primarily in developing countries and nations most vulnerable to rising seas and other climate-related threats. But it is not clear now much of that is new money and how much is already committed under existing international aid programs.

The package includes $8 billion in loan guarantees for innovative energy efficiency and fossil fuel projects, including efforts to capture and store carbon dioxide emissions from power plants burning coal and natural gas.

Taken together, the officials said, the pieces of the plan would allow the United States to meet Mr. Obama’s goal of reducing greenhouse gas emissions by 17 percent below 2005 levels by 2020. That was the promise Mr. Obama made at the United Nations climate summit in Copenhagen in December 2009.

Environmental advocates, who have been impatiently waiting for Mr. Obama to make good on repeated pledges to address climate change, said they were encouraged by the forthcoming proposals.

“Really, this is a moment that’s been 20 years in the making,” said David Hawkins, director of the climate center at the Natural Resources Defense Council. “Most of the last 20 years, unfortunately, have not been well spent.”

Andrew Steer, the president of the World Resources Institute and a former top official at the World Bank, called the presidential initiative “extraordinarily important.”

“The United States has been notable in recent years for a lack of a national climate strategy,” Mr. Steer said in a telephone briefing for reporters. “It’s a wonderful thing to see that he is reclaiming this issue.”

Environmental advocates are likely to be disappointed that the president will not directly address the proposed Keystone XL pipeline, which would carry 800,000 gallons a day of heavy oil from the Canadian province of Alberta to Gulf Coast refineries.

Most environmental groups oppose the project on the grounds that the crude mined from Canadian oil sands is particularly carbon intensive and will significantly exacerbate climate change. They have mounted large street protests and media campaigns to pressure the president to veto the project, making it a symbolic test of his commitment to dealing with climate change.

“If he were to apply the same level of scrutiny to the pipeline as he did to this climate strategy, we are very optimistic that he would reject it as inconsistent with his other climate goals,” said Melinda Pierce of the Sierra Club.

A senior administration official who briefed reporters on the president’s climate plan said Monday that the decision on the Keystone pipeline was on a separate track at the State Department and would not be announced for months.

Mark Landler contributed reporting from Washington, and Justin Gillis from New York.